Home Buying in 22312>Question Details

Charlie,  in 22101

Here is one for all those Listing Agents out there. I am interested in a property that went under contract without being on the market for a day on

Asked by Charlie, 22101 Mon Apr 26, 2010

a friday. The status of the house is now "contingent kick out". The house sold for about 40% lower than market value, and 80% lower than peak value in 2006. Now, we contacted the listing agent to put in an offer but agent says that the bank has already accepted the offer after only 3 days and is now in contract. How come it takes the rest of the country months before a bank will answer our offer but with this property the bank answers in 3 days? And accepts an offer that is ridiculously low? Isn't the seller get really screwed here? How is this LISTING agent acting in the best interest of the seller? Or is this just complete incompetence?

Help the community by answering this question:


If it is a REO property (where the bank is the seller) and not a short sale (which takes months to get a response) then it is typical for the bank to respond pretty quickly to an offer made, usually within 1-3 days. If the offer was submitted to the bank on Friday then it would not be out of the question to get a response by monday morning. My question is if you know what the offer price is, because it might be different than the list price? If it is still marked under contract, that information is not to be disclosed until the property settles. If you have any other questions I would be happy to help.
1 vote Thank Flag Link Mon Apr 26, 2010
My immediate response is to say the bank owns this property outright, and it is not a short-sale. The listing agent is getting the "list price" from the bank who hired 3 other agents to give "price opinions" or BPO's on the property. Banks document and research a lot of data since they may be based 500+ miles away.

I have sold this type of property, and it sold in 3 days too. The bank lists it with an agent, gets an offer that is acceptable, then sends the buyer a 10-page addendum with the banks legal language (like they never lived there, etc.) which gives the buyer a 10-day period to conduct a home inspection and be satisfied with the house (it's an "as-is" sale). This as-is home may be damaged on the inside, and you know condition has a big impact on value.

So the agent adds it into the MLS. Buyers see it immediately and know it is a deal (you did too) and submit an offer to the bank. The bank says "OK" and says "here is our addendum and you have ten days to get it back to us". The agent changes the status to "contingent/kick-out" which is standard language in McLean, VA MRIS which is out MLS.

Hope that is helpful!
Web Reference: http://www.dougfrancis.com/
0 votes Thank Flag Link Thu May 6, 2010
The owner may have already found a buyer and the agent is just entering it in the system. There are a few good reasons to enter them into the system at this point. ...if the deal falls through, they can resell, the agent gets credit for the sale, other agents use the input information to better evaluate other sales they are working on. If we are working on a fsbo, we also have those entered into the system at closing so it may look like it was never on the market and look 'fishy'. Truth is, we are just entering sales so that the information can be used to help keep us all updated on all sales. If the deal you mentioned closes and it is a non recourse sale and the seller gets to walk away all the quicker - the seller likely won't care if it sold for less.
0 votes Thank Flag Link Tue Apr 27, 2010
This deal was negotiated before it ever hit the MLS and even with the additional guideline every bank and mortgage servicer puts in place to help assure its investors that they are receiving a fair market value for the asset is to require that all transactions be "arm's-length" transactions. This simply means that the parties are not related, either by family relation or by contract, but I am seeing this happen over and over. Maybe not in this deal, but then who knows . . . I saw it happen in my own neighborhood!

Sandy Leaf
Fairfax Realty, Inc.
0 votes Thank Flag Link Mon Apr 26, 2010

Sounds to me like the agent/seller did a short sale. SO this contract is really nothing until reviewed by the bank. I am seeing this done pretty often and it's almost as if they are using straw buyers to make it happen.

For example, let's say I am the agent and you are a cash investor...I list the short sale..using you as the buyer. If the bank happens to agree on a price that you find acceptable..then you buy the house. IF not then I put the house on the market at what is now the "approved price". I DO NOT CONDONE THIS BEHAVIOR..but it seems to be happening and with some frequency.

I agree with my colleagues that most likely you do not know the "sale price" but only the "list price" per MLS. Not until the deal is closed is the information public.

Good luck to you and if I can be of assistance please contact me. Thanks

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
0 votes Thank Flag Link Mon Apr 26, 2010
Yep, I agree with Jay. This deal was negotiated before it ever hit the MLS. Good for the Seller? Probably not, but maybe they just wanted to shed the debt.
0 votes Thank Flag Link Mon Apr 26, 2010
In addition to the answers previous given, the reason that the actual price is not disclosed prior to closing is that if they were to publish that and then for some reason it did not close, then everyone would know what was accepted as the offer and that would not be in the best interest of the seller. It happens that for one reason or another the property doesn't close and has to be put back on the market. In that scenarior, the seller would want to keep his options open as to what price he wants to relist it at.

Hope that helps.

Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Mon Apr 26, 2010
What does "contingent kick out" mean?
0 votes Thank Flag Link Mon Apr 26, 2010
The reality is that all that matters is what any individual Seller's situation currently may be. It could be that the Sellers were in a situation where all their available options were bad ones and the Sellers had to choose the best of the bad for their particular financial situation and time frame. A good Listing Agent provides their client all the options, refers them to attorneys & financial professionals, and negotiates with the banks to get their clients what they need. Sounds like the best case scenario with a bank that responded within 3 days. I know it's frustrating to have your purchasers miss out on a house they like and I know it's happening a lot in the current market, but the Listing Agent's job is to do what's best for their clients' particular situation.
0 votes Thank Flag Link Mon Apr 26, 2010

I agree with Jay's answer, also, until this goes to settlement, no one will know what the sale price of the property. In fact, the sale price might even be for more than what you saw listed on on MRIS.

There are many variables to foreclosures and short sells and auctions!

Good question, I wish we all knew the inside tricks to getting these deals.

Sandy Leaf
Fairfax Realty, Inc.
0 votes Thank Flag Link Mon Apr 26, 2010
You can sell properties in about a hundred differant ways. Sounds like they knew what deal they were cutting, and just ran it through the MLS to get the credit for the sale. You are not privy to the sale details.
Nothing bogus about that.
0 votes Thank Flag Link Mon Apr 26, 2010
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